ISLAMABAD  -  Adviser to Prime Minister on Finance and Revenue Abdul Hafeez Shaikh on Wednesday said that economic situation has improved in the country due to the policies of the incumbent government. Pakistan’s exports have increased, imports and current account deficit reduced, tax collection enhanced and number of tax filers have also shown massive growth, Adviser to Prime Minister on Finance and Revenue said while addressing a press conference along with government’s economic team. Federal Minister for Energy Omer Ayub, Federal Minister for Economic Affairs Hammad Azhar, Federal Minister for Planning and Development Khusro Bakhtiyar, Adviser to Prime Minister on Commerce Abdul Razzak Dawood and Special Assistant to the Prime Minister on Petroleum Nadeem Babar were also present.

Shaikh informed that government has decided to approach Supreme Court of Pakistan to settle the issue of Gas Infrastructure Development Cess (GIDC). The apex court would guide the government on the GIDC. The Supreme Court decision would be acceptable for us, which could also go against us.

He admitted that annual tax collection target of Rs5.55 trillion is challenging and difficult. However, he said that government would make every possible effort to achieve this tax collection target during current fiscal year. He also admitted that Federal Board of Revenue (FBR) had faced shortfall of Rs64 billion in tax collection in first two months (July and August) of the current fiscal year. However, he said that shortfall in tax collection occurred due to reduction in imports of the country. Tax collection at domestic level has shown healthy increase. The FBR has collected Rs580 billion in two months of the current fiscal year as against Rs509 billion in the corresponding period of previous year showing growth of 25 percent.

Adviser to Prime Minister on Finance and Revenue informed that number of tax filers has recorded growth of 27 percent. Number of tax filers has increased to 2.5 million in tax year 2018 as compared to 1.9 million in the previous year. He said that government had decided to clear the sales tax refunds that are pending since 2015. The government would release tax refunds on 16th of every month through computerized system. As many as Rs 1.7 billion of income tax refunds (upto Rs 1 Lakh) for all years to be released immediately. The verification process for other outstanding refunds would be expedited. FBR will now pay sales tax refunds through the newly installed Fully Automated Sales Tax e-Refund (FASTER) system to exporters of five sectors, he added. Shaikh informed that Pakistan’s exports had increased to $2.23 billion in July 2019 as compared to $2.01 billion in the same month of the previous year. Meanwhile, the imports had decreased to $4.1 billion in July this year as compared to $5.5 billion in the corresponding month of the last year. The reduction in imports and increased in exports had helped in narrowing the current account deficit by 73 percent in July 2019, he maintained.

Adviser on Finance said that the government had received payment amounting to $224.6 million and Rs35.262 billion (equivalent of $224.6 million) from two cellular companies respectively as their licence renewal fee. This amount, Rs70 billion, is half of the amount, which cellular companies would give to the government. Other cellular companies had approached Courts for the settlement of licence renewal fee. However, he hoped that Court would give decision in government’s favour. The government would receive Rs200 billion as total from the cellular companies under licence renewal fee.

Sheikh informed that government would receive Rs800 billion as non-tax collection during current fiscal year. The government would receive Rs Rs200 billion as total from the cellular companies under licence renewal fee, Rs300 billion from the privatization of LNG power plants and Rs300 billion as profit from the State Bank of Pakistan. The Cabinet Committee on Privatization had also directed the Privatization Commission to expedite the process of privatization.

He said that Executive Committee of the National Economic Council (ECNEC) in last week had approved Rs579 billion worth development projects. ECNEC approved major projects related to the agriculture sector at a cost of about Rs250 billion. The agriculture sector would record healthy growth of 3.3 percent during ongoing financial year.